Your Scaffolding Policies Can Affect Your Workers Compensation Insurance Rates December 2, 2011

Painters, stucco installers, masons, carpenters and many other types of contractors from time to time need to build scaffolding to perform their work work.  Most of these workers think of scaffolding as a tool to get at high work sites.  But the truth is that scaffolding should be first and foremost a safety tool in itself.  This article will discuss the safety features of scaffolding as a refresher and to help you keep your workers safe while working on and around scaffolding.

So many different kinds of workers compensation insurance claims arise out of improper use or improper building of scaffolding.  We see  injuries and death on scaffolding due to poor planning for assembling and dismantling as well as collapse due to missing tie-ins or bracing or because of loads that are too heavy, or due to slippery surfaces.

Fall protection is an important part of scaffolding and should be incorporated into any scaffolds which put the worker at a height of more than 10 feet above a lower level.  To protect the worker from falls, top rails should be installed at about 42 inches in height.  Mid-rails should also be used and should be installed about halfway between the top rail and the platform surface.  If cross bracing is used instead of a mid-rail, than the X should fall between 20 and 30 inches above the work platform for that level.  Alternatively, screens or mesh can be used in place of the mid-rail but they should extend from the top rail all the way down to the working level.  And remember, if you plan to build scaffolding to a height of 125 feet or more, then your scaffolding must be designed by a registered professional engineer.

In addition to protecting the workers on the scaffolds, they also should function to provide protection to workers below from falling tools or debris.  Every scaffold should have toe boards installed.  The toe boards should be a minimum of 4 inches high and should be installed on all sides and at all levels.    All workers in this environment should also wear hard hats at all times.  Be sure that all scaffold footings are level and are capable of supporting the loaded scaffold and 4 times the expected weight that will be put on the scaffold at any one time.

For more information on scaffolding and the regulations associated with using them, read the OSHA 1910.28 regulation by clicking here.   If you take the time to carefully and safely construct and maintain scaffolding and enforce safety procedures for how to use them, then you will probably reduce the claims against your workers compensation insurance and your general liability insurance policies.  Doing this will help to keep your insurance rates lower and reduce the associated costs of job interruption that always occur with an on the job accident.

Clinard Insurance Group has niche insurance programs designed for many types of contractors who use scaffolding in their work.  We have a painters insurance program, a carpenters insurance program, a masons insurance program and many others.  If you would like help with your contractors insurance, please call us, toll free, at 877-687-7557.

Workers Compensation Insurance – Crossing A State Line Could Leave You With Huge Bills November 28, 2011

Workers compensation insurance was and is by its very nature a compromise.  In agreement for not allowing your employees to sue you for injuries that occur on the job, these same workers gain the benefits for injuries and accidents that are spelled out in your state’s workers compensation statute.  Whatever the statute says determines when and how much the injured worker will receive.   And this compromise keeps business and commerce humming along with much less disruption.  But we have 50 states in this country and thus 50 different sets of statutes and rules.  So what happens when you cross state lines to do work or to hire other employees?   That’s when things become more complicated.

First of all, as you read this article, bear in mind that our starting point and our vantage point  is North Carolina and North Carolina workers compensation insurance rules.  If your business is located in some other state,  then some of what you read in this blog may or may not apply to you.  Please keep that in mind as you read further.

There are several ways in which going out of state can get a company in trouble with workers compensation rules and laws.  The most vulnerable businesses are those who can pick up and go to another state to perform work there.  Usually this applies most to artisan contractors whose work opportunities here in North Carolina may be diminished by the economy and so they chase storms and other natural disasters to find work in other states. 

If a contractor with a NC workers compensation insurance policy takes their North Carolina employees (those who live in NC and were hired in NC by your NC based company) to do work in other states, then their North Carolina workers compensation policy will protect them from losses that may happen on these out of state jobs.  But, if a contractor hires new employees who live in this other state, then that contractor is risking a coverage gap.  You see, some states have more generous benefits to injured workers.   Some will allow injured workers  to choose which state (either the state they live in or the state they worked in or the state where your business is domiciled) work comp rules they want to file their claim under.  Of course these newly injured employees of yours will choose the state with greatest benefits for them and their claim.  If that happens to be a state other than NC, then you may be paying some of the claim yourself.  This is because your NC workers compensation policy could be limited to the benefits stipulated by NC workers compensation law.

There are several  solutions to this problem.  The safest solution  is to let your insurance company know who is working where and let them add the appropriate state rates and class codes for those workers to your policy.   A catch all type of solution which is less fail safe, is to endorse the all states endorsement on to your workers compensation policy.   The all states endorsement on a NC workers compensation policy will extend benefits for your policy to match those of the states listed on the endorsement. 

Another  area where employers can run into trouble is with the employees who live in a different state from the one in which the business is located.  This often happens with businesses located near state lines.  If your business is based in NC but you are near the Virginia border for instance, you may  hire employees who live in Virginia.   If this happens, then you should add Virginia rates and class codes to your NC workers compensation policy for those employees on your staff.

The last trip wire to watch for in all of this is the monopolistic state fund states.  These are states that require that all workers compensation insurance in their state be written by the state government workers compensation program.  This means that no private insurance companies are allowed to write workers compensation insurance in these states.   If you operate in one of these states and have a claim there, your only protection on your NC workers compensation insurance policy will have to come from the employers’ liability insurance section on your workers compensation insurance.  This may be suffice if your exposure is only incidental but if you are running ongoing projects and operations in that state or hiring employees that live in that state, my advice is that you purchase a policy from that state’s monopolistic state fund.   Don’t take chances here, the risks are just too great to ignore.

When it comes to workers compensation insurance, all of the simplicity of the policy disappears as soon as you start crossing state lines for work or for hiring.  You should make sure that you keep your agent informed of what you are doing and where you are doing it.  Clinard Insurance Group, located in Winston Salem, is an agency with a great deal of experience in the North Carolina workers compensation business.  If we can help you with your workers compensation insurance questions in NC, please feel free to call us, toll free, at 877-687-7557.

The Work Comp Experience Mod – A Quick Look At What Every Small Employer Should Know August 19, 2011

In NC, employers with 3 or more employees are required to buy a  workers compensation insurance policy.  Most employers will  also eventually learn about the experience rating plan in NC and the tool that implements it,  called the experience modification factor.  We call it the experience mod for short and this little tool will leverage your attitude about employee injuries to either become a huge money saver or cost your company big money.  Understanding how your mod works and how it is calculated will load the odds in your favor that the leverage here works in the right direction for you.  This article is can help you do just that.

The experience modification factor is the tool that puts into action the concept of experience rating in North Carolina workers compensation insurance.  Experience rating is simply allowing each company to have their own workers compensation rate that reflects their past loss experience.  This kind of rating plan is generally a very good thing for employers who want to protect their workers and keep injuries at a minimum.  For those who aren’t, the experience mod can be a brutal punishment.  But when you think about it, it is a much fairer system to reward careful employers and not force them to pay for all those losses that the careless ones generate. 

Your experience mod is simply a modifier on your policy  that is applied to your total premium to better reflect the loss experience that you have had in the recent past/  With a  mod that is larger than 1, you will be paying an additional surcharge on your policy for your past losses.  If your mod factor is lower than 1, and then you are receiving a discount for good past loss experience.  With mod factors running as high as 3.25 and as low as .72 or even lower, the range from reward to punishment can be huge.

Not all workers comp policies in NC are eligible for experience rating.  There are two factors involved, time, and premium size.  First of all, the experience must develop over time, so your policy must be in place for at least 2 years before an experience period can be evaluated.  Companies that are new in business and buying their first workers compensation policy, won’t be experience rated during the first two years.  The second criterion is size of the business, measured by workers compensation premium.  Very small work comp policies may never reach a large enough size to be eligible for experience rating.   This is due in part to the costs of experience rating a company and the unlikelihood that past experience will accurately predict future experience with very small companies.  Therefore, employers are not experience rated unless they have had an average annual work comp premium of more than $2500 for the past two years, or have payrolls in the last year, or two years that would develop a premium that exceeds $5000.  But once those thresholds are hit, your workers compensation policy will be experience rated by the NC Rate Bureau.

The experience rating process looks at losses during the experience period.  That period is usually 3 full years, ending one year prior to the effective date of the modification.  For example, a modification done on January 1, 2010, would look at the payrolls and losses for the prior policies effective January 1, 2006, January 1, 2007 and January 1, 2008.   As you may have already guessed,  a year of bad losses on your is going to hang around and increase your mod and thus your total work comp costs for a long time to come.

One more important aspect of experience rating for you to understand is just how your modification factor is calculated.  The formula for deriving the mod itself is fairly complex so I won’t get into much detail, but as an employer, you should know a few important things about this process.  First, small losses have the greatest impact on driving your mod higher.  The formula classifies all losses under $5000 as primary losses and these losses carry the greatest weight in the formula, especially for small employers.  Larger losses are capped and then given increasing importance for larger employers, but for the little guy, the small losses will sting the most.  The message to small employers is clear  – loss frequency is the strongest measure by which the NC Rate Bureau will punish you via your experience modification factor.

In the past, some employers would pay the small medical only claims out of their pocket, just to keep from reporting them to their workers comp company and risk driving up their mods.  This practice is dangerous for both the employer and the employee and to remedy this, NC now only applies 30% of the medical only losses to the rating formula.  Those still engaging in this practice probably don’t even know the risks that they are taking and how the mod rating process has changed.   Please file all work comp claims with your insurance company promptly.  Paying them yourself could leave you vulnerable if the claim spirals out of control and the insurance company decides that you prejudiced their ability to control the loss.

Your best approach to your experience modification factor is to work to help keep claims from happening, and then if they do happen, take appropriate action to help your employee get healed and get back to work as quickly as possible.  You can go a long way toward both of these goals if you purchase your workers compensation insurance policy from a specialty insurance company, one that writes only workers compensation insurance.  These companies usually have a more streamlined claims process and many also have on staff doctors, nurses and case managers.  This kind or proactive approach to reducing your claims costs will help you keep your experience modification factor as low as possible.  Also, these specialty workers compensation insurance companies will also have loss control services that you can implement right away to prevent some claims from happening in the first place.

Your experience modification factor is a way to even the playing field and to help make sure that those causing the accidents and injuries are the ones who pay the greatest share of their costs.  Take advantage of your new awareness now to make sure that you move yourself and your company to the credit side of the experience mod equation.  Here at Clinard Insurance Group, we help employers all across NC save money on their workers compensation insurance.  We understand this complicated insurance policy and we will take as much time as you need to understand all of your options so that you can best leverage the marketplace to better protect your employees while reducing your insurance expenses.   If we can help answer your questions about NC workers compensation insurance, please call us, toll free, at 877-687-7557 or visit us on the web at www.ClinardInsurance.com.

Code 59 – Is This Little Number Driving Up Your Work Comp Rates? August 12, 2011

The Office of Inspector General (OIG) recently investigated Medicare and Medicaid medical providers suspected of overbilling the system by using billing override code 59.  Code 59 is just one of 35 different coding edits used to bypass Medicare’s National Correct Coding InitiativeThe OIG audit showed that 40% of all code pairs billed with the code 59 modifier resulted in overpayments to medical providers.  And these overpayments totaled $59 million.  Worse yet, code 59 is  just one of 35 modifiers used to override coding edits on bills submitted.   The OIG audit also indicated that computer billing programs did not detect overbilling errors cause by the use of these modifiers.  The errors were only found in the rare instance that the bill was reviewed independently by a human being.   We all know that there is fraud in the government medical systems, but what does that have to do with you and your workers compensation insurance rates?

In North Carolina, workers compensation policies are experience rated policies.  This means that your claims experience, either good or bad, will affect the rates that you pay each year.  This is accomplished through the use of an experience modification factor on each policy.  Your experience modification factor, referred to in the business as your mod, is an extra multiplier on your rate.  Good loss experience over time can result in a modifier that is less than 1.  When that happens it means that you are receiving a discounted rate below what you would have otherwise had without the excellent record.  But when your mod increases to numbers above 1.0, then you are paying an more for your workers compensation policy due to your past claims experience.  Experience mods are calculated based on the frequency and severity of claims.  So if you can avoid severe losses and reduce the amount that is paid out, then you can help to keep your experience modification factor lower.  It is an important maxim to remember that money paid out for your workers compensation claims is almost always going to cost you more in premiums later.  So you must do all that you can to reduce and control workers compensation losses.

Here are some important facts to keep in mind.  First, workers compensation insurance companies face the same mult-billion dollar challenges as the Medicare and Medicaid system face when it comes to avoiding fraud and billing errors.  Most workers compensation insurance companies rely solely on computer technology to find and correct billing errors and most do not conduct reviews of modifier 59.   More often than not, they just apply the fee schedule discount and pay the bill without investigating the accuracy of the medical bill.

So what can a business owner do to protect his or her business from intentional and unintentional billing errors that will mean rate increases in the future?  The best plan of action is to carefully select the insurance company you buy your work comp insurance policy from in the first place.   I generally recommend that businesses buy their workers compensation insurance policy from a company that writes workers compensation insurance only.  These specialty companies tend to have lower rates to begin with, but beyond that, since workers compensation claims are the only type that they handle, they generally have a better system for watching for fraud in the billing process.  They also will often provide on staff nurses to manage a case as well as more systematic and careful review of all medical bills.  Thes additional claims services will almost always result in lower claims costs and will generally get your injured employees back to work sooner.  These techniques will not only show up in lower initial rates, but will also help you keep your experience modification factor lower, thus keeping your costs lower over time. 

At Clinard Insurance Group, we are an independent insurance agency that is actively engaged in helping businesses all across North Carolina with their work comp and business insurance.  We can show you how to cut your workers compensation costs dramatically with very little effort on your part.  If you have questions about your business insurance policies, please call us, toll free, at 877-687-7557 or visit us on the web at www.ClinardInsurance.com.

Workers Compensation Insurance – What About Your Safety Program January 11, 2011

Workers compensation insurance for many industries, especially those in construction such as painting contractors, HVAC companies, electricians, landscapers and plumbers just to name a few, can be a huge piece of the insurance budget.  In addition, with workers compensation insurance in NC, your policy is experience rated, which means your losses follow you around for years and add to the cost of your particular policy.  So why don’t more contractors embrace safety training?

The answer of course is complicated but one of the biggest reason you see so little safety training in the small contractor’s world is that either the contractor doesn’t understand how much it can impact his bottom line, or if he does, he just doesn’t know where to start.  This is where company selection can be crucial to the small contractor.  There are some companies out there that specialize in workers compensation insurance and don’t deal in any other types of policies.  One of the advantages of using these types of companies is that often they will provide you with lots of safety training tools for free.

These tools can range from helping you meet posting requirements in your shop to advice and help with safety services and even helping you develop and create a true, on the job safety training program for all of your employees.  One example of a company that does this very well is Summit Insurance.   Take a quick look at the offerings that they have on their web site by clicking here.   You can see that they are fully engaged with their clients to help them find ways to reduce accidents and downtime associated with injuries.

Let’s face it, when you have a workers comp claim it will cost you money on your policy eventually.  But more importantly, think of the immediate costs of stopping work to get your injured employee to the doctor and the downtime associated with waiting on an employee to get back to work.   A large percent of accidents that occur on construction sites are preventable with better education and better rules enforcement.  If you are already spending money on a work comp policy, you should ask yourself what your insurance company is doing to help you reduce and prevent accidents.   Remember, there is much more to the workers compensation policy than just the rate, or the bottom line price.   As you can see, there are huge hidden costs in the process and you need to hire a workers comp company that will help you manage those huge hidden costs.

Clinard Insurance Group is a NC insurance agent who specializes in helping small contractors and construction trades all across North Carolina.  We understand your difficulties and we speak your language.   We have developed specialty programs for all different types of small contractor groups including a landscapers insurance program, and electricians’ insurance program, a special insurance program for painters, an HVAC insurance program, a plumbers insurance program and many others.  If you need help with your business insurance, please call us toll free at 877-687-7557 or visit us on the web at www.thecontractorshelper.com.

This article was pulled and written from source information, all of which may be found in its entirety at www.InsuranceAnswerGuy.com.

NC Work Comp Insurance – Not All Rates Are Created Equal October 27, 2010

If you have a business with employees in NC, then chances are you are have at least a passing familiarity with work comp insurance and how it is set up.  In my conversations with lots of different types of business owners all across North Carolina, I have found that many wrongly assume that workers compensation rates are the same from one company to the next.  Nothing could be further from the truth.  This article will go over the rating process and how the rates are established and what this means for you, the business owner and insurance consumer.

Let’s start with the easy part, the policy coverage itself.  In NC, all workers compensation policies have the same coverage form.  The coverage is statutory, which means that it follows the current NC workers compensation statutes.  Therefore, with the exception of a few items, all policies are basically the same.  The rates however, are not the same. 

Each insurance company has to file their rates with the NC Rate Bureau for each different classification of labor that they write.  And while company A may love to insure landscapers and their rate would reflect that, company B may not want to write this class of business, so their rates might be higher for that classification. 

So what does this mean for you?  Well, if you own a business in NC and are buying workers compensation insurance, then you should take some time to understand the marketplace and make sure that you have purchased your coverage from a company that is eager to write your business and has the rates to reflect that eagerness.  Also, in the past it may have been wise to always place your workers compensation insurance with the same company that handles your general liability insurance, your business auto insurance or your commercial property insurance.  The workers compensation marketplace in North Carolina has changed quite a bit over the past 15 years and now there are many insurance companies out there that write only workers compensation insurance.  We call these monoline work comp companies and they are a good choice for lots of NC business owners because the are not only able to offer very competitive rates on the classes of business that they want to write, but also, they often have loss control and back to work programs that are more effective and more helpful to small businesses.

At Clinard Insurance Group in Winston Salem, NC, we specialize in helping small businesses all across NC with their workers compensation insurance policies.  We have created special insurance programs for plumbers insurance, HVAC insurance, carpenters insurance, painters insurance, restaurant insurance, floor and tile installers’ insurance, landscapers insurance and electricians insurance.  If you need help with your workers compensation insurance or any other insurance policies, please feel free to call us, toll free, at 877-687-7557 or visit us on the web at www.ClinardInsurance.com.

The source information for this article was pulled from other articles which can be found at www.InsuranceAnswerGuy.com.

Electrician Work Comp Insurance – Pay As You Go, Saves The Cash Flow May 3, 2010

Electrician insurance plans should all include a workers compensation policy unless of course you work alone and have no employees.  And work comp policies can really punch a hole in your cash flow if not handled correctly.  For more information on this, read my blog on the audit trap.  In addition,  there come times when work is hard to find and you may experience a drop in your cash flow.  What if there were a program that would adjust your premiums to match your current work load and cash flow?

In fact this program exists and is available today.  With a little understood tool called pay as you go, you can have your income cash flow better match your workers compensation premiums.  Now understand that not every company that  writes workers compensation policies for electricians can or will offer this feature, but if you can find one that does and if their price is right, this can be a nice benefit for electricians. 

Let’s look at the mechanics of this type of work comp plan.  Of course the details will  vary from plan to plan, but the very best of them will send you an email or a mail reminder each month.   You then log on to their web site and enter your payroll totals for the past month.  The web site will then calculate your premium for that month and you can pay your bill on line right then and there with a credit card, or the system will generate a paper bill which is mailed to your office.   What this means for you is that now your workers compensation expense tracks your payroll with only a 30 day delay.  And this short delay means that your workers compensation expenses will more nearly track your revenue and mean less wild swings in your monthly cash flow.

Ok, there are a few things to watch out for here.  First of all, there are some payroll service companies out there offering pay as you go workers compensation to go with their payroll service.  On the surface this sounds great but there is a problem with this approach.  One huge factor in your workers compensation insurance costs is your experience modification factor.  And you need to work proactively to protect that mod to keep future costs lower.  Companies that specialize in payroll services and sell work comp as a sideline are rarely as good at keeping claims costs low as companies whose prime mission is workers compensation insurance.  These dedicated work comp companies will often have nurses and case managers on staff to help reduce your overall claims costs.  And keeping your claims costs low will keep your rates low over time.  To learn more about this read my blog on protecting your experience mod.

One last thing to mention here is that the pay as you go feature offered by some companies is often only available to electricians whose premium exceeds a certain level, often as high as $5000.  There are a few companies out there who can offer this feature at a much lower premium level, but you will need to find an agent who specializes in electrician’s insurance to find them.

At Clinard Insurance Group, in Winston Salem, NC, we are the electrician insurance specialists.  We have companies that can write pay as you go workers compensation policies for electricians with annual premiums as low as $1000.  If we can help you with any of your electrician insurance policy questions, please call us, toll free at 877-687-7557 or visit us on line at our electricians’  insurance program policy page.

Some of the source material for this article was drawn from other blog articles which can be found at www.InsuranceAnswerGuy.com.

Construction Insurance in NC – small contractors, don’t forget your work comp insurance December 18, 2009

I hear it so often with artisan contractors, they don’t think they need workers compensation insurance because they have too few employees or the general contractor that they work under provides that coverage.  While these are reasons that allow them to legally avoid buying a policy, in both cases they leave the artisan contractor’s destiny in the hands of others and may ultimately cost the small contractor his or her business.  Here’s the real scoop on workers compensation insurance in North Carolina for small contractors.

It doesn’t matter which area you work in, whether you are hunting for painter insurance, plumbing insurance, lawn care insurance, carpenter insurance, landscaping insurance, grading insurance or even insulation or flooring insurance, you really will do better to always purchase a work comp policy for your small contractor business.  Let’s take a look at the three reasons people don’t purchase workers comp insurance for their small business.

Reason #1  –  Less than 3 employees.  While it is true that in North Carolina, if you have less than 3 employees, then the state will not require you to purchase a workers compensation insurance policy, what is seldom said in  the next sentence is that whether or not you buy insurance, you are still on the hook for the claims.  The workers compensation insurance policy was created as a compromise.  Workers gave up their rights to sue their employers in most cases and the trade off for them was that employers agreed to pay the benefits associated with injuries and sicknesses on the job according to the statutory payouts required by each state.  So, as the employer, you will have to pay for your employees job related injuries, sicknesses and time out of work in accordance with the NC workers compensation statutes.  If they are permanently disabled or even out of work for several months, these costs could run into the tens of thousands and possibly close your business.  Many small contractors are choosing not to buy workers compensation insurance based on their number of employees and this could have a devastating effect on their business.

Reason #2  – It costs too much.   Let’s face it, workers comp insurance can be expensive.  But if you have an agent that specializes in your type of business, then you will have a much better chance of getting your policy set up in a way that saves you the most money while still protecting you from financial ruin.  And really while the short term costs may seem high what is your entire business worth?

Reason #3  – The general contractor covers it.  While for some small contractors, this may be true, there are several reasons why this is a poor choice.  First of all, if the general contractor were to go out of business, or let their insurance cancel through some error, then you are back on the hook and if the claim is large enough, then there goes your company.  Also, if you do work not associated with that contractor then you are back to going bare.  Secondly,  most general contractors add a large premium to the rate that they are charged to carry you on their policy so you will probably find you are paying more than you should to be covered this way.

In almost every case, it is a better choice for small, artisan construction companies to purchase their own workers compensation insurance policy directly.  The risks associated with going bare, or riding on the general contractor’s coat tails are just too high.

At Clinard Insurance Group in Winston Salem, NC, we specialize in helping small artisan contractors of all types with their insurance needs.  We have special insurance programs designed for carpenters, carpet cleaners, concrete and masonry construction, electricians, flooring installation companies, grading and excavating contractors, guttering and siding installation companies, HVAC companies, landscapers and lawn maintenance companies, painters and plumbers.  We work hard to help all of our clients become informed insurance buyers.  If we can help you with your business insurance needs, please call us, toll free, at 877-687-7557 or visit us online at www.TheContractorsHelper.com.

The source information for this blog article was pulled from information which can be found on line at www.InsuranceAnswerGuy.com

Landscapers – When it comes to landscape insurance, here’s a tip that could save you big money November 16, 2009

Landscape insurance comes in many different forms, from general liability insurance to workers compensation and equipment insurance policies.  These policies apply whether or not we are talking about landscaper insurance or lawn care insurance.  And while many landscape jobs overlap from planting to mowing, knowing how to set up your landscape contractor insurance policy to take advantage of the lowest rates can mean more dollars back in your pocket.

The tip that I want to talk about today is for landscape contractors who also perform lawn care or lawn mowing services.  If your company provides both of these services, then you may have a way to simply adjust the classification codes on your work comp policy and reduce your overall workers compensation policy costs.

Here’s the trick.  Most landscapers use the code number  0042 which is titled: Landscaping and Gardening on their workers compensation policy.  This is a catch all code for most all landscaping operations.  But what few landscapers know is that there is another code number 9102 which is titled: Park – NOC.  This NOC stands for not otherwise classified.  If you have employees whose job is just mowing services, then their payroll can be put in this class code 9102 for a cheaper rate.

How much will you save?  Well, generally speaking the rate for the class code 9102 is about 60% of the rate for class code 9102.   You will save somewhere on the order of $3.00 or more for every $100 of payroll.  That’s like cutting your mowers payrolls costs by 3% with one easy phone call.

At Clinard Insurance Group, in Winston Salem, NC, we specialize in helping landscapers all over North Carolina with their insurance needs.  We speak your language and we understand your business.  We have special programs that should help you reduce your overall insurance costs, without sacrificing the coverage you need and want.  If you would like help with your landscape insurance or your lawn care insurance policies, please call our office, toll free, at 877-687-7557, or visit us on the web at the landscapers helper web page.

The source information for this article was taken from articles which can be found at www.InsuranceAnswerGuy.com.

Contractors – Prepare For The Impact Of Your Uninsured Subcontractors June 4, 2009

Uninsured subcontractors are often just a necessary evil in some types of construction jobs.  But if you are the contractor who is hiring extra help, and this help is uninsured, you should know what you need to do on the front end to be sure that this cheap labor option doesn’t turn out to be the most expensive help you’ve ever hired.  Understanding exactly how uninsured subs will affect your general liability insurance policy and your workers compensation insurance policy is key to reducing your risks and your costs. At Clinard Insurance Group in Winston Salem NC, we specialize in helping all kinds of contractors with their construction insurance policies.  And we want to make sure that all of our insurance clients avoid the nasty surprises that often come along with hiring uninsured subcontractors.

There are really three ways that the subcontractors that you hire that have no insurance policies in force can hurt you.  The first is the classification audit trap.  The second is the insurance coverage punch, and the third is the out of control large loss problem.  Let’s take them one at a time.

First up is the classification audit trap.  Two of the main insurance policies for contractors are the general liability policy and the workers compensation policy.  The North Carolina general liability policy and the North Carolina work comp policy both compute the premium due by using payroll as the rating basis.  If you hire a subcontractor to work for you, you can provide a certificate of insurance for that subcontractor and anything that you have paid that subcontractor will not be charged against you as payroll at the end of your policy term when the policy is audited by the insurance company.  Likewise, if you can’t provide a certificate of insurance for that sub, then you are going to have to add the entire job cost paid out to that sub as payroll.  You can protect yourself against this going in by withholding an amount for insurance from the payment you make to the sub.  But, beware, the general liability policy and the workers compensation policy both have different rates for different kinds of work.  If you are a carpenter and you hire a roofing contractor to work for you to do roofing work, you won’t be protected from the audit trap by using the rate shown on your policy.  That’s because the rate for the roofer is much higher than that for a carpenter.  If you are unsure of what to withhold, either demand that your sub get insurance, or call your agent to find out what the correct amount per $100 of payroll should be withheld.  As you can see, this is a tricky business and if you don’t pay attention to the details and do your homework, you will get burned and will be overpaying for your general liability and workers compensation policies.

Now let’s take a quick look at the insurance coverage punch.  Hiring an uninsured subcontractor is a big no no from the insurance company underwriter’s viewpoint.  This is because the underwriter immediately assumes that you don’t have the same control over a subcontractor that you do over your own employees.  This means that losses are more likely from an uninsured subcontractor.  The underwriter will view your uninsured subs as big liabilities that make you a less attractive risk to the insurance company.  This means that when your audit comes in with uninsured subs listed, the underwriter will be less generous with discounts and you may actually see your rates go up for all of your insurance policies from you commercial auto to your general liability to your workers compensation policy.  Once again the real message to you is that you should not hire uninsured subs.

Last of all, we have the out of control large loss problem.  While you might want to argue against it, statistically is it true that you have less control over your subcontractors.  And that not only means that they are more likely to cause losses on your policies, it also means that they are more likely to generate losses which are not covered by your policy.  Does your policy have an exclusion for the type of work they are doing?  Will the losses they cause exceed your coverage limit?  The answer to both of these questions could well be yes.  Ask yourself why your uninsured subs don’t have insurance protection.  Is it because they are deemed uninsurable by underwriters?  If so, why are you letting them have a free ride on your policy at the risk of damaging your ability to purchase insurance in the future?  

The truth is that hiring an uninsured contractor to work on your projects is risky and in some cases just plain costly.  If you can avoid this type of practice you will be better off from and insurance standpoint every time.  At Clinard Insurance Group in Winston Salem, NC, we work hard to make sure that our contractors understand the ins and outs of their policies and the best practices they should put in place.  If you have any questions about workers compensation insurance, general liability insurance or any other business insurance policy, please feel free to call us, toll free, at 877-687-7557 or visit us on the web at http://www.ClinardInsurance.com.

The source information for this article was drawn from the informative blogs at www.insuranceanswerguy.com